FHA Back to Work Program

Borrowers with a prior
bankruptcy, foreclosure, deed-in-lieu, or short sale may be eligible for an FHA insured loan if the
bankruptcy, foreclosure, deed-in-lieu,
short sale was the result of a documented extenuating circumstance.

Borrowers may also be eligible for an FHA insured loan on a
purchase transaction after 12 months from the
completion, discharge, trustee's sale if the borrower
meets the requirements for extenuating circumstances Economic Event.

A few key items for borrowers
applying under the enhanced guidelines:

Purchase transactions only

The borrower must complete
Housing Counseling no more than thirty (30) days prior to application. The
counseling cannot be completed after application.

The borrower must use on of
HUDs approved Housing Counseling Agencies. FHA will require a copy of the certification
of counseling completion and a copy of the disclosures provided by the
Housing Counseling Agency.

To be eligible for these
enhancements, borrowers must have experienced a minimum of 20% reduction to
the household income for duration of at least six (6) months. Written VOE’s
from previous employers and tax returns will be required for all household
members; this can require verifying prior income and employment for
individuals not on the new transaction.

Household income is defined as all parties
on the prior Note/Deed of foreclosed property even if they are not on the new
transaction. If there was no prior mortgage/foreclosure, then the guidelines
are applied to the borrowers of the current loan.
Borrowers must have a
satisfactory credit history prior to the Economic Event. Borrowers with
habitual late pays, disregard for credit, mismanagement are not eligible for
these enhancements.

January 20, 2010 -Credit score

FHA announced a set of policy changes to strengthen
the FHA. The changes announced are the latest in a series of changes
enacted in order to better position the FHA to manage
its risk while continuing to support the nation’s housing market
recovery.

The Federal Housing Administration insures FHA loans
and did not used to require a minimum credit score. The new FHA policy
changes requires a minimum credit score of 580 for 3.5% down payment
and anyone purchasing a home with a score lower than 580 will require
10% down payment.

The FHA has taken the following step:

Update the combination of credit scores and down payments for new borrowers

New borrowers will now be required to have a minimum credit score of 580 to qualify for FHA's 3.5% down payment program

New borrowers with less than a 580 credit score will be required to put down at least 10%

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www.MORTGAGE-WORLD.com, LLC is not an agency of the state or federal government and is not affiliated with the Federal Housing Administration.
Nationwide Mortgage Licensing System ID 1630225
All loans arranged with third-party providers.
Licensed in the State of New Jersey
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Ridgefield NJ 07657
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